Last Updated February 2020:
If you are new to the world of eCommerce, especially SAP eCommerce, you are in the right place. This guide provides a gentle introduction to eCommerce, what it offers and how eCommerce is used by companies that use SAP.
Let’s start with a basic eCommerce overview…
What is eCommerce?
eCommerce is a general term that describes transactions that are conducted digitally or on the Internet. If you ever purchased something online, you have used eCommerce. eCommerce is also sometimes used to describe other online actives such as online ticketing, internet banking, and payment gateways, but for the most part, eCommerce revolves around purchasing goods.
In the world of SAP, the term “eCommerce” refers to both online sales activities as well as the software product(s) that expose SAP information like materials, prices, inventory levels etc. at a web-based storefront. Customers interact with the eCommerce storefront (web site) to make purchases without the need for somebody, in the seller’s back office, to key-in the order into SAP GUI (…using VA01 for example).
Why should enterprises care about eCommerce?
The core advantage of eCommerce is the unparalleled reach to customers and global markets. With eCommerce, you are no longer restricted to a specific geographical area or time of day. Even if your current customers are loyal and local businesses, sooner or later they will start exploring alternative options to purchase what you offer on the Internet, which certainly means you will need some sort of eCommerce presence or they will go to competitors who have such presence.
B2B vs. B2C eCommerce
Two of the most common eCommerce models are Business-to-Consumer (B2C) (also known as Retail eCommerce) and Business-to-Business (B2B). The main difference between B2B and B2C is who is the purchaser – in B2B purchaser as a businesses, while in B2C it is an end consumer. An example of B2B would be a business selling some sort of material to another business to be used in their products.B2C eCommerce is probably the eCommerce that you are most familiar with and if you ever purchased something on Amazon, you were part of B2C transaction. In the end, B2B and B2C both are forms of eCommerce, but each provides a specialized set of features that cater to the business or casual user.
The rise of Cloud solutions
As you may have already noticed, vendors tend to liberally use the the word “Cloud” in their software. Names like SAP Commerce Cloud, SAP Sales Cloud, Salesforce Sales Cloud, SAP Marketing Cloud, Salesforce Marketing Cloud, SAP Service Cloud, Adobe Experience Cloud are signs of another trend in enterprise software – transition from on-premise to cloud offering. The term “cloud” means something different to different people, so here is a quick primer on how the term “cloud” is mostly used in the world of SAP. All solutions can be looked in terms of:
1. Who owns and manages the hardware the solution runs on and
2. Who owns and manages the software itself.
Here are the possibilities:
|Hardware Ownership||Software Ownership||Model|
|rent machines (e.g. from Amazon/Google/Microsoft)||own||Public/Private cloud|
|rent from Software Vendor (e.g. from SAP or Salesforce)||rent from Software Vendor (e.g.SAP or Salesforce)||Vendor Cloud|
Here is a quick example an how this may work using Hybris (the eCommerce platform that underlines SAP eCommerce solution) and a made-up company “Best Goods International” (BGI):
- On Premise Model: BGI purchases Hybris from SAP and builds eCommerce solution that it runs it in its own data center. BGI is responsible to install, manage and configure Hybris, including adding enough capacity to handle their Christmas traffic. BGI staff needs to be able to upgrade Hybris itself, the machines Hybris runs on (e.g. Install Windows/Linux patches) and fix any hardware and network issues. The main benefit of this model is that BGI engineers can fine tune any aspect from – networking to machine hardware to squeeze as much as possible from their hardware and software investment. They can also customize Hybris in any way they want to fit their business. Downside is that BGI needs to have engineers with a wide range of skills to support all the moving parts in a complex eCommerce system 24/7. This model is mostly used by large, companies that already have (..or can pay for) all that skills, expertise and infrastructure.
- Public/Private Cloud Model: BGI purchases Hybris from SAP and builds eCommerce solution, but rather than running it on its own hardware, they rent hardware from a cloud data center owned by Amazon, Google or Microsoft (or multitude of other cloud providers) . BGI is still responsible to install, manage and configure Hybris itself, as patch the machines Hybris runs on (e.g. Install Windows/Linux patches), but it does not need to worry about fixing or upgrading the hardware or network connectivity. Also, the hardware cloud provider will willingly (and temporarily) rent more machines when they need extra capacity during the holiday season. BGI can fine tune their Hybris install but is at the mercy of the Cloud provider for every networking or hardware outage they encounter.
- Vendor Cloud Model: BGI rents Hybris (in this case called SAP Commerce Cloud) from SAP. SAP will “rent” both the software as well as the hardware. The solution will run in SAP cloud Platform in a data center managed by SAP. SAP will be responsible to manage and scale the entire solution. This model outsources most of the day-to-day management of the eCommerce system to the vendor using “pay-per-use” model. The disadvantage of this model is that there are certain constrains that SAP imposes on what customizations you can do to eCommerce itself (because they need to support the overall system).
Historically the trend has been to move from On Premise towards Vendor Cloud. Vendor cloud is where most vendors want to be eventually as it generates a recurring revenue and they can optimize their investment in hardware and operations to service more customers with less resources (which increases their profit margin). Vendor Cloud is also a good solution for many small and medium size customers as it lowers the barrier of entry. They can now “rent” an enterprise grade eCommerce system without the need for a large initial investment. This also aligns the eCommerce expenses with the revenues generated by eCommerce which is a key for many smaller companies who are transitioning from traditional “phone/fax” ordering to to an online sales model. As of now, the industry is split roughly 50%-40%-10% across the three models.
eCommerce & CRM Suites
eCommerce is usually the central point where customers start their interaction with a company (e.g. “Nothing happens until something is sold“). eCommerce systems can often be seen as a hub with links to other enterprise systems that deal with customers. Because of this tight relation, many software vendors bundle multiple independent software solutions and market them as “end-to-end” CRM or Customer Experience suite. Some of the most popular enterprise CRM suites are SAP C4/Hana, Oracle CRM or Salesforce Customer 360.
Let’s look at all what makes a modern eCommerce CRM suite
eCommerce storefront is at the core of any eCommerce system. It exposes a product catalog as well as ordering and checkout functionality. Product catalog is the star of the show as this is the main feature that customers see when they browse to the storefront. Organizational hierarchy of the catalog, how up to date are products and prices, catalog customizations based on customers and geography as well as ability to easily find the items customers are looking for are qualities that make or break an eCommerce store. Once customer is ready to purchase, they go through ordering and checkout process. The is where a lot of the differences between B2B and B2C storefronts lie. While both strive for fast and painless checkout, B2B checkout process is usually a bit more complicated as it often requires integration with purchase orders, more complicated shipping and payment. Popular eCommerce storefronts in the SAP ecosystem are SAP Commerce Cloud (formerly known as SAP Hybris) and WECO eCommerce. Both are specifically designed for a tight integration with SAP ERP. Many standalone eCommerce storefronts such as Salesforce Commerce Cloud, Magento, BigCommerce, Broadleaf Commerce, Sana eCommerce, Kentico are also used by many customers, but they often require specialized connectors to move catalog and order data between the SAP and the eCommerce system.
Regardless if you sell to consumers or businesses, when something goes wrong with the purchase (e.g. order was incorrect, was shipped to a wrong place or product is not working), customers usually tend to go back to the place they purchased it, in this case eCommerce storefront, as a starting point to seek resolution. This is why, apart from facilitating sales, eCommerce storefronts also serve as a first level of customer support. Customers expect to find in one place all their interactions, order history, invoices and various shipping documents that they may need for their internal accounting. For any issues they will look for ways to get personalized customer support via voice, chat or by creating a support ticket. This is where the integration with Customer Support systems like SAP C4 Service Cloud or Salesforce Service Cloud becomes important. Service personnel needs to know who is the user and what they have purchased so far so they can provide the appropriate help.
As a counterpart to customer support, quite often, eCommerce storefronts also integrate with Accounts Receivable payment portals like ePay or Corevist Bill Pay that give customers ability view and pay any outstanding invoices.
Marketing and Sales
One for the most beneficial (from a revenue generation standpoint) eCommerce integrations is with Marketing automation systems like Hub Spot, Adobe Marketo, Salesforce Marketing Cloud or SAP C4 Marketing Cloud. In this case, eCommerce platform provides marketing with data about what products customers are looking at, which products are usually bought together or how customer interaction changes across geography or time of day. Marketing then feeds data such as discounts, promotions and up/cross sells back into the eCommerce site to provide the proper suggestion at the moment of purchasing.
When your customers are businesses and products they buy are complex, big ticket items, and the sales cycle is long, managing the selling process itself becomes a complex task. This is where Sales Automation systems like SAP Sales Cloud or Salesforce Sales Cloud come to play. They play a critical role in the sales process by providing overall sales tracking, analytics and highly customized configuration, pricing and quotes (CPQ) through the sales process. Often the CPQ processing is automated so that eCommerce systems, during checkout, can obtain a proper price and quote in real time from the Sales Automation system.
A recent trend in enterprise commerce is shifting focus to Customer Experience Management (CX). With the increased popularity of social media and its direct influence on revenues, it is important to track what makes customers happy (or unhappy). Analyzing customer sentiment and making appropriate corrections is becoming an important lever for driving revenue or differentiating from the competition. Customer experience platforms like Qualtrics and Birdeye are offering comprehensive solutions to track and analyze customer feedback through surveys at various customer interaction points (for example when customer completes an order).
Vendors will sell individual software components separately, especially if you need to start small or already have an existing Marketing or CRM system, but the tight integration across the entire suite is what makes purchasing a suite a compelling offer.
What is SAP eCommerce?
A SAP eCommerce solution allows customers to go through the entire order to cash process without even seeing the SAP system (or knowing it exists). Customers access the website, place an order and pay for it in a typical and simple to use flow. What the customer doesn’t see is the order, delivery and invoice that is created in SAP (on the back-end). Now that you don’t have to manually create these orders, your customer service team is freed up for other activities.
SAP eCommerce Functionality
SAP eCommerce platforms shine in 3 main areas.
- Catalog Management
- Shopping Cart and Check-Out
- Customer and Order Management
Product Catalogs feed material data from SAP to the eCommerce website. Catalogs can contain multiple forms of rich content such as images, videos, drawings, datasheets, product reviews, marketing material, you name it! This content can be easily stored and accessed from content management servers. This makes updating content easy as some content would otherwise need to be transported through SAP systems. Depending on which SAP eCommerce platform you choose, the material data, pricing and availability can be show in real time.
- SAP B2B eCommerce Catalog: Only accessible to customers who are allowed by your company. Customer specific catalogs can be determined based on customer login credentials.
- SAP B2C eCommerce Catalog: Allows an open shop and guest checkout. Also allows user registration.
- Dynamic eCommerce catalog: Enhances the standard catalog functionality by generating catalogs based on various data requirements.
- Variant Configuration: Configurable products can be added to product catalogs. Utilize SAP characteristics and classes to create configurable materials in the product catalog.
The shopping cart contains all items a customer is creating a sales document for. These items can be selected from navigating the catalog, entered manually or uploaded from a spreadsheet. Checkout allows the customer to choose a shipping speed and pay for their order using an invoice, credit/debit care, bank account, Paypal, etc.
- Any SAP order Types Allowed: Use standard orders or the custom order types used by your business – Orders, Inquiries, RFQs, Returns, Fulfillment, etc.
- SAP Partner Data: Sold-to, Ship-to and Payer information is all available if you want it displayed to a customer. This allows customers to choose existing SAP partner data or create new ship-to’s and payers.
- Payment and Shipping: During check-out, shipping and payment methods configurable and can vary from simple selection options to complex integration with third party shipping and payment processors.
Customer Order Management:
Customers can view their order status, delivery status and invoices all within the SAP eCommerce webstore.
- SAP Document Flow: the SAP eCommerce site can utilize SAP’s document flow, so customers can easily find their related documents.
- SAP Outputs: All associated outputs from SAP can also be accessed from the eCommerce site. Easily view and print order confirmations, packing slips, BOL’s, invoices, etc. Any document you already view in print inside SAP.
- WECO eCommerce has built a functionality for customer browsing behavior tracking and comprehensive analytics using Clickstream Analysis.
- Using Clickstream, it is possible to track how long a user stays on the website, what products are areas they visit etc. The Clickstream data is stored directly in SAP and can be analyzed with the delivered reports or transferred for further reporting using standard tools such as SAP Business Warehouse.
Planning a switch to SAP eCommerce?
Each company has a set of specific requirements and processes for selling their products. When researching alternative eCommerce solutions for SAP, usually the prime focus is put on how various products stack against these requirements. Vendors have a good set of “battle cards” to highlight how the catalog or shopping experience of their product is better than the competition and in most cases functionality fit (…or misfit) is easy to see. What is not very obvious during negotiation is the overall picture of how everything will work together and how long would it take. Over the years, our observation has been that there are several ‘hidden’ costs that could have a substantial impact on the success of any eCommerce project:
- How does an eCommerce site fit in the company’s overall web presence? Larger businesses usually rely on a separate CMS system as their main customer-facing web site, and the eCommerce platform is a “new” web property that is customized to fit into the overall corporate brand. For smaller enterprises, the eCommerce solution must serve a dual role: both as an eCommerce platform; and a customer facing web site. In this case, the chosen solution needs to support at least some Content Management functionality and customization to enable the marketing department to adjust the public messaging without requiring the involvement of IT.
- Who is responsible to control and support the eCommerce solution – Marketing? Sales? IT? Based on the availability of internal resources there is usually a tradeoff between increased visual richness and flexibility that Marketing department wants (at the expense of using more resources to support it), or the eCommerce solution can be supported with limited resources (usually those already supporting your SAP system) at the expense of somewhat limited visual presentation. The right choice depends on your situation, but if not considered properly, it can become inconvenient and costly in the long term.
- What is the budget for deployment and customization of the eCommerce solution? License costs are usually known upfront and don’t change once the project is signed, but the implementation can account for 2X to 3X the cost of the license, and frequently is the area where most cost overruns occur.
- How long can you afford to have your resources involved in deploying the eCommerce platform? Even if most of the work is done by a 3rd party, there is usually a core team of your own resources who’ll need to be directly involved. They’ll test and make key decisions (as well as compromises) that always pop-up in the process of going live. In our experience, supporting the implementation takes approximately 10% – 50% of their working day, which can’t be spent on their core responsibilities. If your implementation takes 3 months, this may cause a manageable impact. If it takes 8, 12, 18 months, the hidden cost of your resources’ involvement can be felt as your other internal projects are getting delayed or put on hold. The cost of internal resources is rarely budgeted for, yet adds up quickly to the overall cost of the project.
What is the best eCommerce platform to integrate with SAP?
At present, the world of SAP eCommerce solutions can be grouped into 3 categories:
- eCommerce solutions offered by SAP, such as SAP Commerce Cloud (formerly known as SAP Hybris) now part of C/4HANA. This option offers rich functionality and scalability, while also maintaining integration with SAP for product catalogs, pricing, and shipping information. If budget is no issue, Hybris is a safe choice and well supported by SAP. In addition, it’s supported by a multitude of 3rd party SAP partners that can customize every aspect of the eCommerce site. In some cases, adoption. The main factor to consider when going with Hybris is the time it takes to implement. While the cost of the license may be acceptable (and a few resellers can offer deeply discounted license fees), it is usually the cost of services related to deployment, implementation, and customization that end up being the majority of the cost. Consequently, the limited budget causes many mid-size companies to look for alternatives.
- ‘Off-the-shelf’ eCommerce solutions like Magento, Shopify and BigCommerce. Because of their acceptance and wide use across many industries, these options have a vast community of developers which offers a range of integrations to a variety of ERP systems and 3rd party platforms. These integrations include marketing automation, ad retargeting, and sophisticated eCommerce analytics. Off-the-shelf options are a top choice for marketing-driven companies because they give complete control of the look and feel of the customer engagement experience. They also integrate well into marketing, advertising, and social media channels.
A drawback to using an off-the-shelf eCommerce solution is that since they’re built to be ERP- agnostic they require considerable effort to properly connect to SAP, and more importantly, keep up with any changes in SAP for product catalogs, inventory, pricing and shipping conditions. To keep up with these changes, proper and reliable synchronization with SAP is vital. This can be accomplished by using 3rd party synchronization platforms such as Corevist, or MuleSoft, or by developing custom in-house synchronization, which typically involves using SAP OData endpoints. In either case, the result is an eCommerce solution made up of three, somewhat independent, parts: the eCommerce platform itself; the synchronization solution; and SAP. In order for the eCommerce platform to function properly, it is critical for all 3 parts to run in unison all the time (…and that synchronization is where issues often arise).
- eCommerce plug-ins for popular CRM/CMS platforms such as Sitecore, Broadleaf, Kentiko or Salesforce. Companies that already rely heavily on existing CRM/CMS solutions often find it attractive to extend those solutions with a limited eCommerce capability – usually to offer their customers an easy way to purchase spare parts or consumables. While those ‘extension’ projects usually start relatively quickly and with a low budget, they tend to snowball into a big hassle due to the same synchronization challenges that exist with using an off-the-shelf eCommerce platform
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